Two recent health insurance mergers have been blocked by judges:
A federal judge on Wednesday ruled against U.S. health insurer Anthem Inc's proposed $54 billion merger with smaller rival Cigna Corp, derailing an unprecedented effort to consolidate the country's health insurance industry.
The U.S. Justice Department sued in July to stop Anthem's purchase of Cigna, a deal that would have created the largest U.S. health insurer by membership, and Aetna Inc's planned $33 billion acquisition of Humana.
On Wednesday, Judge Amy Berman Jackson of U.S. District Court for the District of Columbia issued the ruling against Anthem's deal, saying that the merger would have worsened an already highly concentrated market and was likely to raise prices.
Last month, a different U.S. judge ruled against Aetna's proposed deal for Humana.
Government antitrust officials argued that both deals would lead to less competition and higher prices for Americans. The acquisitions would have reduced the number of large national U.S. insurers from five to three.
Also at Bloomberg, The Hill, and WSJ.
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Amazon, Berkshire Hathaway and JPMorgan Team Up to Disrupt Health Care
Amazon, Berkshire Hathaway and JPMorgan Chase announced on Tuesday that they would form an independent health care company to serve their employees in the United States. The three companies provided few details about the new entity, other than saying it would initially focus on technology to provide simplified, high-quality health care for their employees and their families, and at a reasonable cost. They said the initiative, which is in the early planning stages, would be a long-term effort "free from profit-making incentives and constraints."
The partnership brings together three of the country's most influential companies to try to improve a system that other companies have tried and failed to change: Amazon, the largest online retailer in the world; Berkshire Hathaway, the holding company led by the billionaire investor Warren E. Buffett; and JPMorgan Chase, the largest bank in the United States by assets.
Various health insurance and pharmacy companies were hit by the news:
The move sent shares of health-care stocks falling in early trading. Express Scripts Holding Co. and CVS Health Corp., which manage pharmacy benefits, slumped 6.7 percent and 5.5 percent, respectively. Health insurers Cigna Corp. and Anthem Inc. also dropped. The health-care industry has been nervously eyeing the prospect of competition from Amazon for months. While the new company created by Amazon, Berkshire and JPMorgan would be for their U.S. staff only, this is the first big move by Amazon into the industry. The new collaboration could pressure profits for middlemen in the U.S. health-care supply chain.
Related: $54 Billion Anthem-Cigna Health Insurer Merger Rejected by U.S. Judge
CVS Attempting $66 Billion Acquistion of Health Insurer Aetna
CVS, one of the largest pharmacies in the U.S., has made an offer to acquire the health insurer Aetna Inc.:
U.S. pharmacy operator CVS Health Corp has made an offer to acquire No. 3 U.S. health insurer Aetna Inc for more than $200 per share, or over $66 billion, people familiar with the matter said on Thursday. A deal would merge one of the nation's largest pharmacy benefits managers and pharmacy operators with one of its oldest health insurers, whose far-reaching business ranges from employer healthcare to government plans nationwide.
[...] A tie-up with Aetna could give CVS more leverage in its price negotiations with drug makers. But it would also subject it to more antitrust scrutiny. The deal could also help counter pressure on CVS's stock following speculation that Amazon.com Inc is preparing to enter the drug prescription market, using its vast e-commerce platform to take market share from traditional pharmacies.
[...] The sources did not specify how much of CVS' bid is cash versus stock, but given CVS's and Aetna's market capitalizations of $77 billion and $54 billion, respectively, a substantial stock component is likely in any deal.
- A CVS-Aetna Deal Is Logical But Also a Stretch
- Wall Street Sees a CVS, Aetna Deal as a Revolutionary Defense
Also at NYT.
Related: Judge Finds That Aetna Misled the Public About its Reasons for Quitting Obamacare
$54 Billion Anthem-Cigna Health Insurer Merger Rejected by U.S. Judge
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Walmart could acquire the health insurer Humana, in a deal reminiscent of CVS's acquisition of Aetna:
Walmart Inc. is in preliminary talks to buy insurer Humana Inc., according to people familiar with the matter, a deal that would mark a dramatic shift for the retail behemoth and the latest in a recent flurry of big deals in health-care services.
It isn't clear what terms the companies may be discussing, and there is no guarantee they will strike a deal. If they do, the deal would be big: Humana currently has a market value of about $37 billion. It also would be Walmart's largest deal by far, eclipsing its 1999 acquisition of the U.K.'s Asda Group PLC for $10.8 billion. Walmart, which in addition to being the world's biggest retailer is also a major drugstore operator, has a market value of about $260 billion.
[...] Walmart has a vast pharmacy business, with locations in most of its roughly 4,700 U.S. stores and in many of it Sam's Club warehouse locations. Humana is a Medicare-focused insurer that could deepen Walmart's relationship with a key demographic—seniors—at a time when the retailer is being threatened by Amazon on several fronts.
Also at CNN.
Related: $54 Billion Anthem-Cigna Health Insurer Merger Rejected by U.S. Judge
CVS Attempting $66 Billion Acquisition of Health Insurer Aetna
Amazon, Berkshire Hathaway, and JPMorgan Chase to Offer Their Own Health Care to U.S. Employees
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(Score: 4, Informative) by Thexalon on Friday February 10 2017, @02:17PM
1. Mandate that everybody has to buy health insurance.
2. Buy up all competitors in many states, so that everybody has no option but to buy it from you at whatever price you care to charge.
3. PROFIT!!!
There's no "????" step here for a reason.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Friday February 10 2017, @03:13PM
I think the ???? maybe should've been to make sure any lawsuits are handled in texas.
(Score: 1, Interesting) by Anonymous Coward on Friday February 10 2017, @03:46PM
NY State is making some progress toward getting rid of insurance companies:
https://www.healthcare-now.org/blog/new-york-assembly-passes-universal-healthcare-legislation/ [healthcare-now.org]
http://www.singlepayernewyork.org/ [singlepayernewyork.org]
While I have no idea if this is going forward, it's a safe bet that the insurance companies are fighting against it...
(Score: 3, Interesting) by ikanreed on Friday February 10 2017, @05:15PM
Man, New York is starting to sound worth the 250% cost of living.
(Score: 2) by bob_super on Friday February 10 2017, @05:54PM
I heard you can get great housing discounts in an area with an appealing name: Love Canal.
(Score: 0) by Anonymous Coward on Friday February 10 2017, @08:02PM
Too late, Love Canal is all fenced in now. There are other superfund sites around Western New York (Buffalo, Niagara) still available...
(Score: 2) by Gaaark on Friday February 10 2017, @10:38PM
Finally a judge (American judge!) has decided that competition is good, and you can't get competition when there are only 2-3 companies competing?!
--- Please remind me if I haven't been civil to you: I'm channeling MDC. ---Gaaark 2.0 ---